Businessman accused of using company money for prostitutes, lavish lifestyle

An eastern Iowa businessman is accused of diverting money from his bankrupt business to pay for prostitutes and other pricey goods.

Forty-year-old Keith Chapman of Monticello has been charged with five counts of bankruptcy fraud and one count of filing a false tax return. Chapman ran Chapman Lumber Company in Hopkinton, a small town 12 miles southeast of Manchester.

The U.S. Attorney charges Chapman diverted at least $454,000 from the company into a bank account in Cedar Rapids which he used to secure the services of prostitutes as well as buy jewelry, furniture, golf clubs and membership at a country club. The indictment charges Chapman tried to conceal the existence of the bank account.

Chapman’s trial is scheduled to start August 3rd. If he’s convicted on all the charges, Chapman could be sentenced to up to 28 years in prison.